Housing in Southern Africa May 2015

Infrastructure & Mixed Use

the future of African rea The RICS (Royal Institution of Chartered Surveyors) Af r i ca 2015 Summi t i n Johannesburg brought together profess iona l s , academics and industry leaders to examine the future vision for Africa’s real estate market.

A common thread throughout the presentations and discus- sions was recognition that frica is taking its place on the world stage in terms of real estate, infra- structure and construction. There was a clear sense that the RICS can play an important role in helping countries build consistent standards where needed, albeit with a definite focus on collaboration with existing bodies and governments. RICS President, Louise Brooke- Smith, told participants that she has been championing RICS partnerships in Africa and that it was appropriate to hold the conference in the city with the largest GDP in the region. “We’re seeking to spread best practice wher- ever we find it.” The aimwas to share experiences with open minds in a spirit of partnership. While several participants, in- cluding emerging market economist Kganya Kgare from Stanlib, stressed the divergences within the continent, all acknowledged that consistent standards would go a long way to addressing challenges. Inflation in East Africa is well within target and the Kenyan Shilling is very stable, with 6% growth expected in 2015, inflation in Nigeria is expected to ac- celerate from the middle of the year and interest rates are at an all-time high, said Kgare. Africa’s economic growth is pre- dicted to outpace all other continents in the forecast for the next five years showing that four of the world’s 10 fastest-growing national economies will be on this continent. The panel- lists looked at investment sources, risk and the vital ingredients under- pinning ongoing momentum. Com- mercial property is one of the darlings of the market in countries such as Ghana, Kenya and South Africa.

Urban development, planning and land use was another topic of dis- cussion. “Spatial transformation is an evolutionary animal,” said Johannesburg town planner and Manager, Ekurhuleni Metro, Itume- leng Nkoane. He called for a mix of the ‘first and second’ (formal and informal) economies. “As planners, we cannot industrialise in the same way as Europe and America… Liv- ing in a sustainable environment is not only about living in a beautiful environment, but about survival. There should be a shift from being development controllers to being development facilitators.” RICS President Louise Brooke- Smith agreed that planning is a balancing act, citing the increasing neighbourhood approach toplanning and commercialism even in devel- oped countries such as Britain. A common theme throughout the conference was the importance of infrastructure as a core factor in sus- taining growth. In a session on ‘The African economic engine’, the ques- tion was asked what infrastructure sub-Saharan Africa needs to be truly globally competitive. Dale Ramsden, Founder and Man- aging partner, RMP Westport, said

the ‘supply and demand mismatch’ in West African countries such as Ghana, Nigeria and Angola creates opportunities. While RICS can be a huge help in drawing up standards, African countries often wrongly ‘get a bad rap’: “There are planning standards and approval processes. Do proper traffic impact studies, don’t take short cuts and embrace the community.” One of the reasons China is suc- cessfully investing in infrastructure development in countries such as Nigeria is that it is willing to take the extra risk, according to the speakers. Chinese companies tend to take a long-term view based on a model linking infrastructure and real-estate development. This risk will be reduced by in- creased transparency anda zero toler- ance of corruption across the region, the panel agreed. Data points are also key to de-risking – and this is an area where RICS can play a role. Debunking severalmyths about his continent, Broll CEO Jonathan Yach, described himself as a ‘proud afro- optimist’ and said, “Africa is prob- ably one of the most connected of continents, and this is drivinggrowth.” While social instability poses a risk

May 2015